Cliometric Counterfactual Analysis

Cliometric counterfactual analysis is the signature technique of the 'new economic history' pioneered by Robert Fogel: it tests claims about the historical importance of an innovation, institution, or event by constructing an explicit, quantified hypothetical economy in which that factor is absent and measuring how much worse off the counterfactual world would have been. Fogel's 1964 study of American railroads asked not whether railroads mattered but how much, building a hypothetical 1890 economy served by canals and wagons and computing the 'social saving' railroads provided. The shockingly small figure overturned the consensus that railroads were indispensable to American growth, and Fogel and Engerman extended the same explicit, theory-driven, measurement-heavy reasoning to slavery in Time on the Cross. The method fuses neoclassical economic theory, formal counterfactuals, and aggressive quantification of the archival record.